"They (models) loosely resemble the world, but a world so pared down that everything about them is either known, or can be made up. Such models are akin to Tolkien’s Middle Earth, or a computer game like Grand Theft Auto. ... The nature of such self-contained systems is that successful strategies are the product of the assumptions made by the authors. It obviously cannot be inferred that policies that work in Grand Theft Auto are appropriate policies for governments and businesses."

"If much of the modern research agenda of the economics profession is thus unconnected to the everyday world of business and finance, this is also largely true of what is taught to students. Most people finishing an undergraduate course today would not be equipped to read the Financial Times."

"The modern economist is the clinician with no patients, the engineer with no projects. And since these economists do not appear to engage with the issues that confront real businesses and actual households, the clients do not come.

There are, nevertheless, many well paid jobs for economists outside academia. Not, any more, in industrial and commercial companies, which have mostly decided economists are of no use to them. Business economists work in financial institutions, which principally use them to entertain their clients at lunch or advertise their banks in fillers on CNBC. Economic consulting employs economists who write lobbying documents addressed to other economists in government or regulatory agencies."

"That blindness was an element in our present crisis, and conditions our still ineffectual responses. Economists – in government agencies as well as universities – were obsessively playing Grand Theft Auto while the world around them was falling apart."

Falsifiability or refutability is the logical possibility that an assertion can be contradicted by an observation or the outcome of a physical experiment. That something is "falsifiable" does not mean it is false; rather, that if it is false, then some observation or experiment will produce a reproducible result that is in conflict with it.http://en.wikipedia.org/wiki/Falsifiability